Josh Simons

New business to business unfair contract term laws announced

Josh Simons

29 April 2015

Competition and Consumer Law Legislation Updates

On 28 May 2014, we wrote about the Commonwealth government’s consultation paper outlining proposals to extend unfair contract term protections to small businesses (linked here).

 

After extensive consultation both with stakeholder groups and the States, on 28 April 2015 the government released an exposure draft of the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 (Exposure Draft).

 

The proposed new law will apply to all standard form contracts entered into with a small business, with a value of less than $100,000 (or up to $250,000 for multi-year contracts). This will have major ramifications for most businesses which currently use “standard form contracts” for supplies of goods or services to commercial customers in Australia.  Affected contracts are likely to include:

 

  • Licence Agreements or Assignments of intellectual property assets
  • Franchise agreements
  • Agreements for the supply of physical products
  • Agreements for the supply of professional services
  • Agreements with distributors of products
  • Agreements for the supply or procurement of software or computer hardware

 

The consultation period is very brief (just two weeks) and the Exposure Draft is expected to be introduced to, and pass quickly through, the Parliament in the second half of 2015.

 

All businesses that use “standard form” terms and conditions should be aware of what is proposed and consider how it may impact on their business.

 

To read the full blog post, please click here.